Aerohive Networks, Inc. announced consolidated unaudited earnings results for the fourth quarter and full year ended December 31, 2016. Total revenue for the fourth quarter of 2016 was $41.7 million, an increase of 3% compared with $40.4 million for the third quarter of 2016 and a decrease of 10% compared with $46.2 million for the fourth quarter of 2015. Software subscription and services revenue was $8.8 million, or 21% of total revenue for the quarter, compared with $7.3 million, or 16% of total revenue, for the fourth quarter of 2015. For the quarter, the company reported operating loss was $7,342,000 compared with $7,099,000 for the same period a year ago. Loss before income taxes was $7,293,000 compared with $7,115,000 for the same period a year ago. Net loss attributable to common stockholders was $7,264,000 compared with $7,045,000 for the same period a year ago. GAAP gross margin was 68.0% for the fourth quarter of fiscal year 2016, compared with 67.1% for the fourth quarter of fiscal year 2015. Net loss per basic and diluted share allocable to common stockholders was $0.14 compared with $0.15 for the same period a year ago. Non-GAAP net loss was $2,292,000 compared with $1,657,000 for the same period a year ago. Non-GAAP basic and diluted net loss per share was $0.04 compared with $0.03 for the same period a year ago.

For the full year, the company reported total revenue of $169,825,000 compared with $151,659,000 for the same period a year ago. Operating loss was $36,813,000 compared with $43,050,000 for the same period a year ago. Loss before income taxes was $36,642,000 compared with $43,866,000 for the same period a year ago. Net loss attributable to common stockholders was $36,911,000 compared with $44,218,000 for the same period a year ago. Net loss per basic and diluted share allocable to common stockholders, basic and diluted was $0.73 compared with $0.93 for the same period a year ago. Non-GAAP net loss was $12,733,000 compared with $24,958,000 for the same period a year ago. Non-GAAP basic and diluted net loss per share was $0.25 compared with $0.53 for the same period a year ago. Net cash used in operating activities was $14,554,000 compared with $4,957,000 for the same period a year ago. Purchases of property and equipment was $2,161,000 compared with $2,270,000 for the same period a year ago.

For the first quarter of 2017, the company currently anticipates revenue in the range of $35 million to $36.5 million. The company revenue guidance anticipates typical seasonality, compounded by the impact of the elongated sales cycles that Dave discussed in his prepared remarks. On a non-GAAP basis, the company expects gross margins to be in the range of 66.5% to 67.5%, driven by fixed operating costs over a lower revenue base and modestly impacted by new Connect product offerings. On a non-GAAP basis, the company expects operating margins to be between negative 16%, negative 13%, and the company expects other income and expenses including tax expense of approximately $200,000 in the quarter. The company expects non-GAAP EPS to be between a loss of $0.09 and $0.11 on a weighted average common shares outstanding number of 52.5 million shares. On a GAAP basis, the company expects EPS of between negative $0.19 and negative $0.21 a share on the same share count of 52.8 million weighted common shares outstanding. the company GAAP results will include approximately $1.5 million worth of restructuring charges for actions the company took in the first quarter.

The company expects year-over-year decline in 2017 operating expenses and are updating guidance regarding non-GAAP operating profitability achievements. The company's previous goal was to achieve profitability with approximately $50 million in revenue. The company now feel very comfortable that this goal can be reached with revenue levels of approximately $45 million. The company expects to meet this objective through a combination of revenue growth, controlled operating expenses, with focused investment in areas that the company feels will yield high returns and secure long-term success.